How do the best SaaS CFOs help their companies win their market? By providing data for faster decision making: when to hire, how to invest, where to double down. For this reason, cutting close time should always be a top goal of SaaS companies. That involves constantly scanning the horizon for anything that might get in the way of a smooth and fast closing process.
In particular, some of the most notorious culprits that bring the close cycle to a grinding halt include:
- Reliance on spreadsheet-based processes. The days when spreadsheet-based accounting was considered modern are so far behind us that you can’t even see them in the rearview mirror. Even with seemingly advanced spreadsheet software, manual data entry is still inefficient compared to automation.
- Correcting manual data errors with reconciliations: Manual accounting also inevitably requires time to revisit and correct prior mistakes. If you’re a publicly-traded company, this has an even larger negative impact in the form of lost investor confidence.
- Information handoffs between teams: Manually transferring data between teams is suboptimal at best, for similar reasons to the ones mentioned above. It’s inefficient and also carries risks in the form of lost or incorrect data. If you’re picking up on a theme here, you’re spot on: manual accounting is a significant drain on productivity.
If the attributes we just outlined are getting in the way of a smooth and accurate close cycle, is there anything you can do about it? Absolutely
Plan for Automation & Integration
Companies have begun to expect their CFOs to adopt a more active role and do more than report the numbers. Increasingly CFOs are expected to act as key strategic players in their organizations.
As the CFO of a recurring revenue company, one of your top responsibilities is streamlining the “daily financial minutiae” to the best of your ability. Doing so allows you to focus on longer-term strategic issues that will keep your enterprise thriving for years.
In particular, you should look for an accounting software suite that can achieve the following:
- Automate tax structuring and compliance: The close cycle is often slowed down during tax season or when companies scramble to catch up after a regulatory change. Cloud accounting software can set up your tax structuring for you and run automatic compliance checks.
- Eliminate manual data entry: Manual data inputs open the floodgates to all kinds of errors that could delay your close cycle. Or even worse, you could be forced to reopen the books from a previous period to correct errors you didn’t catch and fix in time. If you’re a publicly-traded company, that’s also a significant red flag to investors.
- Put robust internal controls in place: A large part of creating a streamlined close cycle is ensuring everyone knows the exact control architecture. An accounting automation SaaS can help you maintain laser-focused internal controls.
No matter what kind of SaaS company you run, investing in cloud accounting automation will help you cut down on areas where you’re wasting time and money.
Revenue Forecasting & Proactive Planning
Planning ahead and getting a computerized crystal ball for your revenue scenarios is essential to closing quickly and accurately.
When it comes to improving your financial planning and analysis, accounting software can help you:
- Instantly access budget-to-actuals: A single click is all it takes to understand how your actuals compare to your projected budget for a given period. Wasting time manually figuring this out is a classic “close-killer” for many companies.
- See rolling revenue forecasts: With automated accounting software, you can look into the future and make detailed, accurate revenue forecasts in the blink of an eye.
- Get hyper-organized: After you’ve gotten set up with a cloud accounting SaaS, you’ll be able to organize and track your revenue using any criteria you’d like. At a glance, you’ll be able to see your revenue organized by item, balance sheet, global entity contribution, and any others you’d like to analyze or report on.
- Automate billing and P&L: Get an instant picture of your P&L and billing landscapes. Plug in different variables to quickly understand how those landscapes can change based on the different strategies you adopt. There’s one other aspect of the close cycle we haven’t touched on yet.
Consolidation: Keep It Simple
Many SaaS companies operate internationally or act as parent companies to global subsidiaries. For these firms, consolidation can be a massive hurdle to closing the books quickly and confidently.
Accounting software can turn that around by allowing you to:
- Automate transactions between entities: This eliminates manual errors and uncertainty and massively speeds up the SaaS accounting close process.
- See all your key data at a glance: With accounting software like Sage, a glance is all it takes to see all your KPIs, associated entities, and more.
- Report differently for management purposes: Reporting requirements can change depending on the situation and context. Instantly generate whatever report you need, and have it automatically available for whoever needs to see and approve it. You’ll be closing like never before.
Automation is exactly what you need if the consolidation process has been a thorn in your side like it is for so many companies.
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